VIACOM ELECTRONICS (P) LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) This is an appeal at the instance of the importer challenging the order passed by the adjudicating authority rejecting the declared transaction value for the reason that the importer and exporter are 'related persons'. The Commissioner has taken note of Clause (vi) under Rule 2(2) of the Customs Valuation Rules, 1988 which provides that when both parties are directly or indirectly controlled by a third person, they are deemed to be related.

(2.) The Commissioner comes to conclusion that in the facts of the case, Clause (vi) would apply. M/s. TCL Electronic (H.K) Ltd., Hongkong and M/s. Baron International Ltd., Mumbai had entered into a collaboration agreement on 2 -5 -2000 to form a joint venture company namely TCL Baron India Ltd. (hereinafter referred to as JVC). According to the Commissioner, TCL Electronic (H.K.) Ltd. with 51% equity controls JVC and JVC controls appellant/importer. Therefore, foreign supplier and Indian Importer are related persons within the ambit of Rule 2(2)(vi). He further observed that the relationship is corroborated by the minutes recorded on 31 -5 -2001 in the letter head of TCL Overseas Marketing Ltd. where the rates for JVC's procurement from TCL Group companies are negotiated by TCL Electronic (H.K.) Ltd. and Baron International Ltd.

(3.) It is contended by ld. Counsel on behalf of the appellant that the Commissioner has erred in the factual finding that JVC Controls the appellant/importer. He submits that the appellant/importer is an independent company which has entered into an agreement with JVC. Apart from the above, it is in no way related to TCL Electronic (H.K) Ltd. or JVC.